//
[2025] QMC 29
General information, not legal advice.
Magistrates' Court of Queensland
2025-11-12
Brown J
Original judgment source is linked above.
[1] The applicant and respondent were involved in litigation in the Supreme Court under the Building Industry Fairness (Security of Payment) Act 2017 (Qld) (BIF Act).
[2] In those proceedings, the respondent here (as applicant) was unsuccessful resulting in an order for costs in favour of the applicant against the respondent.
[3] The applicant contends that the parties agreed (a compromise) for the payment of costs by the respondent to the applicant fixed in the sum of $30,000.
[4] The application before the court is in effect the applicant seeking to enforce the compromise by applying for judgement for the amount of the alleged agreed sum.
[5] The applicant ATG Project & Property Solutions Pty Ltd (ATG) and the respondent Bright Days Herston Pty Ltd (Bright Days) were parties to a contract under which ATG undertook to perform construction work as part of the development of a childcare centre located at Herston Road, Brisbane.
[6] The decision in which the costs order was made (sought to be recovered in this proceeding) was a decision of Brown J (as Her Honour then was) in Bright Days Herston Pty Ltd v ATG Project & Property Solutions Pty Ltd[1] delivered on 9 May 2024.
[7] That proceeding involved an application seeking an injunction against an adjudicator from making a decision in respect of an adjudication application pursuant to the BIF Act involving the parties.
[8] Her Honour set out in her reasons the relevant background facts,[2] which relevant for the present application were:
- ATG and Bright Days were parties to a contract for construction work.
- An adjudicator was appointed and adjudicated the first adjudication application - in favour of ATG.
- ATG lodged a further application - the second adjudication application.
- Bright Days objected to the adjudicator and contended apprehended bias.
- The adjudicator refused the application to recuse himself.
- Bright Days sought the injunction restraining the adjudicator.
[9] Bright Days' application was ultimately unsuccessful and on 17 May 2024 Brown J made orders that:
[10] Subsequently the parties' lawyers corresponded in relation to the costs order which resulted in an agreement (the compromise) by which the parties agreed that:
- Bright Days pay ATG's costs, as ordered by Brown J on 17 May 2024, in the sum of $30,000 within 30 days.[3]
[11] The applicant has commenced by originating application.
- Affidavit of William Munroe filed 21 February 2025
- Affidavit of Thomas McKillup filed 21 February 2025
- Affidavit of Edward Shephard filed by leave 7 April 2025
- Affidavit of Davin Johnson filed by leave 7 April 2025
[15] Both the applicant's counsel and the respondent's solicitor provided an outline of argument.
[16] Unfortunately, those outlines do not address the principal issue for determination in this application relating to the respondent's contention that it has a 'set-off' in respect of the claim giving rise to disputed facts such that the applicant cannot commence by originating application.
[17] Rule 658 of the Uniform Civil Procedure Rules 1999 (Qld) (UCPR) provides as follows:
[18] Counsel for the applicant and solicitor for the respondent did not address either in their written outlines of argument or their oral submissions the power of the court to give judgement pursuant to r 358 (UCPR) nor the discretion to grant that relief and what informed the exercise of that discretion.
[19] There appears an acceptance by the respondent that r 658 is the appropriate vehicle for the applicant to seek a money judgement.
[20] The Supreme Court considered r 658 in Warwick v Tankey[4] in similar circumstances where the applicant sought to enforce the balance of an unsatisfied compromise. There, the proceedings were commenced by originating application and sought an injunction, but Chesterman J having concluded the settlement agreement remained in force, found that r 658 'appears to confer ample power on the court to give appropriate judgement notwithstanding the form of the proceedings.'[5]
[21] The same conclusion in respect of the power conferred by r 658 was reached by His Honour Judge Morzone KC DCJ in Pezzelato v AGPN Pty Ltd.[6]
[22] There the parties had following a mediation resolved the claim that required the defendant to pay a settlement sum to the plaintiff by instalments. The compromise was reduced to writing. The defendant defaulted on the terms of the compromise and the plaintiff brought an application in the substantive proceedings pursuant to r 658 seeking judgement.
[23] The circumstances of that case are similar to the present proceedings insofar as the relief sought on the application by the plaintiff is concerned.
[24] His Honour concluded that either pursuant to r 658 or r 190(1) the plaintiff had an entitlement to judgement for the whole of the balance of the settlement sum outstanding under the agreement.[7]
[25] I am satisfied that r 658 provides a broad power to give judgement for a plaintiff, in circumstances such as the present where it is alleged that an action has been compromised and the settlement sum has not been paid.
- An order that the Bright Days pay ATG's costs was made on 17 May 2024
- The parties agreed that Bright Days pay ATG's costs, pursuant to the costs order made 17 May 2024, fixed in the sum of $30,000 within 30 days.[8]
- The respondent appears to accept that and takes no issue with it.
[27] Consistent with the decision in Pezzelato v AGPN Pty Ltd the applicant would appear prima facie entitled to judgement pursuant to r 658 (UCPR) for the agreed settlement sum of $30,000.
[28] The respondent, however, contends that it has a set-off against the claim resulting in no amount owing.
[29] The respondent further contends that on that basis there is a matter of disputed fact and effectively:
- The proceeding cannot be commenced by an originating application.
[30] The applicant has commenced by way of originating application.
[31] Rule 11 UCPR provides:
(a) The only or main issue in the proceeding is an issue of law and a substantial dispute is unlikely...
**[32] The authorities considering the entitlement to commence proceedings by way of originating application have primarily involved claims under the Building and Construction Industry Payments Act 2004 (Qld).
[33] In National Vegetation Management Solutions Pty Ltd v Shekar Plant Hire Pty Ltd[9] M Wilson J noting that the proceedings were commenced by originating application observed
no point was taken about the commencement of the proceeding by originating application. In the circumstances my determination of the substantive issues raised on the application should not be taken as approval or disapproval of the form of originating process used in this case.
[34] That decision was cited in Penfold Projects Pty Ltd v Securcorp Ltd,[10] a decision of Irwin DCJ where the respondent argued that the application was really a 'dressed up' application for summary judgement. The respondent took issue with the commencement of proceedings by way of originating application, however, Irwin DCJ concluded that as he could determine the substantive issues raised on the application, it was ultimately not necessary to resolve this question.[11]
[35] Henry J in O'Brien v Robsyn Pty Ltd[12] in considering an application seeking a declaration as to the ownership of property found that there was no likely substantial dispute of facts, and the proceeding was correctly commenced by originating application.
[36] Bright Days contend that it can demonstrate that there is an overpayment by it to ATG and that, that in law, is capable of valid set-off.
[37] Bright Days relies on the affidavit of Mr Johnson who deposes to:
- An adjudication decision was issued on 22 January 2024 in the amount of $1,004,306.52.
- The parties agreed and reduced the adjudication certificate to $459,726.85.
- Bright Days was seeking to set aside that decision in the Supreme Court and alternatively, pursue litigation rights to recover money claimed by ATG pursuant to the erroneous adjudication decision.
- In three paragraphs where he simply inserts tables of calculations, he asserts that there has been an overpayment by Bright Days to ATG of $2,335,715.05.[13]
[38] The applicant contends that the evidence of Mr Johnson is at its highest opinion evidence. Mr Johnson does not annex any material to support the calculations which he simply tabulates in paragraphs 16 - 18. His bare assertion at paragraph 19 that ATG owes to Bright Days the amount of $2,335,715.05 is just that, a bare assertion. I do not find the evidence of Mr Johnson persuasive or proven.
[39] Bright Days contend that what is expressed to be a claim for restitution, the alleged overpayment, is a liquidated demand and is capable of constituting a set-off.
[40] That proposition is challenged by ATG who rely on the decision of Forsyth v Gibbs.[14]
[41] ATG contend that there is no causal connection between whatever the subject matter of the proposed substantive proceedings by Bright Days may be and the agreement as between ATG and Bright Days on the compromise of the costs payable pursuant to the costs order. Keane JA (as His Honour then was) in Forsyth v Gibbs found that the learned primary judge erred in concluding that an alleged claim for negligence constituted a set-off claim justifying the dismissal of an application for summary judgement.
[42] The Court of Appeal found in that matter that the absence of sufficient connection was manifest between the claim and the proposed claim for negligence, concluding
The respondent's claim against Forsyth Pty Ltd and the male appellant arise quite separately from the appellant's claim to repayment of their loan to the respondent. Those claims cannot be relied upon to establish an equitable set-off against the loan debt. No further investigation of the facts is necessary to establish that that is so.
It is important to emphasise that the availability of an equitable set-off between cross-claims does not depend on unfettered discretionary assessment of whether it would be unfair in a general sense for a plaintiff to insist on payment of the debt owed to it while the cross-claim remains unpaid. It is essential that there be such a connection between the claim and the cross-claim that the cross-claim can be said to impeach the claim so as to make it unfair for the claim to be allowed without taking into account of the cross-claim.
In the present case even if the claims which the respondent seeks to set off were ultimately made out against Forsyth Pty Ltd and the male appellant, the liabilities such established could not in any way be said to impeach the appellant's claim to be repaid the debt for the monies they lent to the respondent.
[45] Even if Bright Days had a proper evidentiary foundation for contending that there had been an overpayment giving rise to a claim, which I find not proven on the respondent's material, following the Court of Appeal decision in Forsyth v Gibbs I conclude that there is not such a connection between the claim and the cross-claim such that it can be found that the cross-claim can impeach the claim and therefore does not give rise to a set-off.
[46] The applicant, on undisputed facts, has made out that the respondent has defaulted on the terms of the agreement as to payment of costs.
[47] The respondent is not entitled to any set-off in respect of this claim.
[48] The applicant has an entitlement to judgement for the whole of the settlement sum of $30,000.
[49] I give judgement for the applicant against the respondent in the sum of $30,000.
[50] In the event the parties cannot agree interest and costs, I direct that the parties file written submissions to be no more than 3 typed A4 pages as follows:
[1]Bright Days Herston Pty Ltd v ATG Project & Property Solutions Pty Ltd [2024] QSC 94.
[3] Affidavit of T.F. McKillup 21/02/2025 [11]-[12].
[4] Warwick v Tankey [2004] QSC 274.
[6] Pezzelato v AGPN Pty Ltd [2016] QDC 73.
[8] Affidavit of T.F. McKillup 21/022025 [10]-[11].
[9] National Vegetation Management Solutions Pty Ltd v Shekar Plant Hire Pty Ltd [2010] QSC 3.
[10] Penfold Projects Pty Ltd v Securcorp Ltd [2011] QDC 77.
[12] O'Brien v Robsyn Pty Ltd [2011] QSC 399.
[13] Affidavit of D. Johnson 04/04/2025 [16]-[18].
[14] Forsyth v Gibbs [2008] QCA 103.
ATG Project & Property Solutions Pty Ltd
Bright Days Herston Pty Ltd [2025] QMC 29